IDAHO PUBLIC UTILITIES COMMISSION

Case No. SPL-W-06-01

January 29, 2007

Contact: Gene Fadness (208) 334-0339

Staff from the Idaho Public Utilities Commission will
conduct both a workshop and a formal hearing on Feb. 21 in consideration of
Spirit Lake East Water Company’s request to double rates.

The workshop will begin at 6 p.m. on Wednesday, Feb. 21,
in the Commons Room of Timberlake Junior-Senior High School, 5973 W. Highway 54
in Spirit Lake. The hearing will follow at about 7 p.m.

The workshop will provide an opportunity for customers of
Spirit Lake East Water Company to ask questions of commission staff.
Representatives of the water company may also be available.

The hearing following the workshop is a more formal
procedure during which customers of the company will present testimony to a
hearing officer. Attorneys from both the commission staff and the company may
also be present to ask questions of customers. The testimony, taken by a court
reporter, is entered into the formal record of the case. Although the three
commissioners will not be present, they will receive a verbatim transcript of
the hearing that they will read and consider before issuing their final order.

Spirit Lake East Water Company is requesting that rates
for its approximate 280 customers be increased from $12 to $24 for the first
9,000 gallons of use and from 10 cents to 20 cents for every 100 gallons more
than 9,000 gallons. The company is also seeking an increase in its connection
fee from $1,200 to $2,500. The company maintains that $2,500 is the actual cost
it incurs connecting a new customer to the water system.

Staff members of the commission have reviewed the
company’s application and audited the company. Commission staff is proposing an
annual increase of 28.7 percent compared to the company’s request of a nearly
100 percent increase. The staff proposes an increase from $12 to $13 for the
first 9,000 gallons of use and an increase from 10 cents to 13 cents for every
100 gallons more than 9,000 gallons. Staff is also recommending an increase in
the connection fee from $1,200 to $1,600. Staff is proposing a $13,571 increase
in annual revenue, compared to the company’s $47,866.

The three members of the commission will consider the
proposals from both the company and the commission staff before issuing a final
order. The commission’s decision does not have to be the same as that
recommended by either the company or the commission staff.

This is the second workshop in this case. Commission staff
conducted a workshop on November 8 at Timberlake. The company serves customers
in the Spirit Lake East and Treeport subdivisions in Kootenai and Bonner counties.

Those interested can read documents related to the case,
including staff comments, on the commission’s Web site at www.puc.idaho.gov. Click on the Water
icon, then on “Open Water Cases,” and scroll down to Case No. SPL-W-06-01.